RSM | News for the day | 20-09-2021

The TN Electricity Regulatory Commission (TNERC), in a recent order, approved the tariff of ₹2.61 (~$0,036)/kWh, including the trading margin of ₹0.07 (~$0.0009)/kWh, for procuring 1,000 MW of solar power from the Solar Energy Corporation of India (SECI). The Tamil Nadu Generation and Distribution Corporation (TANGEDCO) will procure the power under the manufacturing-linked interstate transmission system (ISTS) program.

However, the Commission directed TANGEDCO to negotiate with SECI to reduce the trading margin of ₹0.07 (~$0.0009)/kWh.

The Commission said that since the tariff was competitive, TANGEDCO should consider signing the power sale agreement (PSA) after negotiating the trading margin.

TANGEDCO had filed a petition to procure 1,000 MW of solar power from SECI at 2.61/kWh, including the trading margin of ₹0.07 (~$0.0009)/kWh to meet its renewable purchase obligation (RPO) target.

The utility noted that considering all the ongoing solar projects, there was still a shortfall of about 1,850 MW to fulfil the non-solar RPO. Pointing to the commission’s approval for procurement of 1,500 MW solar power from SECI, it said that it had signed an agreement to procure 500 MW at the rate of Rs 2.781 per unit in May last year. It added that to meet the obligation, it was necessary to procure 1,000 MW solar power from SECI under the manufacturing linked ISTS scheme.

In its order, TNERC said it had issued an order on trading margin under TNERC Licensing Regulation, 2005, fixing trader margin as four paise per unit where the sale price is less than or equal to Rs 3 per unit. It directed Tangedco to negotiate with SECI to reduce the trade margin of Rs 0.07 per unit and report the outcome of the negotiation.

“However, since the quantum approval has been issued and the price is competitive, market aligned due to the payment securities issued by SECI, the petitioner may sign the power sale agreement following the outcome of the negotiation and furnish a copy to the commission,” it said.

RSM | News for the day | 20-09-2021